Solar System Installation Cost Breakdown

Ean GoodguyAugust 24, 2018 1809 0

Solar System Installation Cost Breakdown

The principal idea of a greater solar adoption of solar power in global markets is because of the reduction of the so-called Balance of System Hardware prices (mentioned above). All of these determinants account for the hardware costs of a solar PV system, and according to the National Renewable Energy Laboratory (NREL), represent nearly the 40 percent of the total installation price!

That means that present a significant expense on the solar systems is mainly associated with the non-hardware expenses, the so-called soft costs related to:

incentive application
customer acquisition
installation labor
administrative procedures along with local taxes

Soft costs account for 60 percent of the installation expense on a residential PV system!

Soft Costs

Labor charges account for nearly 10-15 percent of total installation costs. The significance is different for every State. The reasons range based on:

solar installers in the generated solar markets
ready solar resources
State-level policies
transport costs
market experience
In this way, the market value of a residential solar PV can vary drastically from one State to another. While taking this factor into account, an overall price of installation labor can be set at USD $0.3 per watt in the US.


O&M Costs

One of the most significant advantages of renewable energy compared to traditional power plants are low O&M costs. That is why most people tend to believe that solar PV technologies are free maintenance technologies.

Solar panels and racking systems (especially fixed and adjustable systems) are excellent. Therefore, the necessary maintenance implies cleaning solar panels two or three times a year.  This is great as dirt, or even snow can block or diminish solar module efficiency, and also reduce lifespan on the long term.

Expenses for maintenance are around $USD 5-10 per panel per year. For a typical household system, this is not a significant amount of money. Among other operating costs are also monitoring and tracking systems, an exciting feature of solar power designs.

Monitoring and tracking systems enable you to measure the savings on electric bills over time by reporting hourly electricity production of the solar system. They are great tools to advise the system’s performance and evaluate if it is working at maximum electricity production.

Additionally, decent solar energy companies should present warranties on their solar systems for at least 15 years after the installation. The warranty should assure proper performance of solar panels over the lifetime (guarantee power output above 85 percent of nominal value) which also covers some of fixture or maintenance charges.


Permits are a difficult subject because they can vary significantly across regions. Like the installation charges, inspection and interconnection (PII costs) costs vary beyond each State, depending on regional power utility and local solar policy laws.

As an instance, the US average cost for the permits is USD 0.1 per watt. The price includes permitting, zoning, inspection, and interconnection; but in the State of New York, licensing, plan and control costs can reach USD $0.24 per watt, and permit expenses and interconnections can reach up to USD $ 0.32 per watt.

Curious about solar hard costs vs. soft costs near you, and how that might affect your own solar panel pricing? We here at HahaSmart you will have a look at what we can offer you on the cost of solar panels and cost of solar installations. We will strive to find you the best prices available. Follow the solar experts. Try our price checker tool. It tells you how much solar power you need and how much you can save on your energy bills each month. Please visit our solar blog to find out more about the benefits of going solar.

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